Shriver v. Woodbine Sav Bank of Woodbine, Iowa, 158

Citation76 L.Ed. 884,285 U.S. 467,52 S.Ct. 430
Decision Date11 April 1932
Docket NumberNo. 158,158
PartiesSHRIVER v. WOODBINE SAV. BANK OF WOODBINE, IOWA. Re
CourtUnited States Supreme Court

[Syllabus from pages 467-468 intentionally omitted] Messrs. Harold B. Claypool and W. E. Wallace, both of Williamsburg, Iowa, and James M. Parsons, of Des Moines, Iowa, for appellant.

[Argument of Counsel from pages 468-470 intentionally omitted] Mr. J. A. Murray, of Logan, Iowa, for appellee.

Mr. Earl F. Wisdom, of Des Moines, Iowa, for Andrew, Superintendent of Banking of State of Iowa, amicus curiae, by special leave of court.

Mr. Justice STONE delivered the opinion of the Court.

Appellee, an Iowa banking corporation, brought suit in the courts of that state to enforce the personal liability of appellant, its stockholder, for an assessment made under the Iowa statutes, which provide for the restoration of any impairment of capital of a bank, by assessment pro rata of the stockholders. The case comes here on appeal, Jud. Code § 237 (28 USCA § 344), from a judgment of the Iowa Supreme Court sustaining the assessment and upholding the statute, which is assailed as infringing the contract and due process clauses of the Federal Constitution (article 1, § 10; Amend. 14). 236 N. W. 10.

On different dates between 1891 and 1917, appellant acquired twenty-six shares of the capital stock of the appellee. Appellee, originally incorporated in 1891, was reincorporated in 1911, appellant acquiring a like number of shares in the new corporation. At that time the liability to assessment of the stockholders in the bank was controlled by sections 1878, 1879, and 1880 of the 1897 Iowa Code, now appearing as sections 9246-9248, 9249, 9250 of the 1927 Iowa Code. These sections authorize the superintendent of banks to require any impairment of capital of a state bank to be restored by an assessment upon its stockholders, as directed by an appropriate order of the superintendent, 'fixing the amount of the assessment.' Section 9247 imposes on the directors a duty to cause the deficiency in capital, thus determined, to be made good 'by a ratable assessment upon the stockholders for the amount of stock held by them,' and requires the proper officers of the bank to give written notice of the assessment, addressed to the several stockholders, which 'shall state the entire sum to be raised, and the amount due from the addressed stockholder.' Section 9248 provides:

'Should any stockholder neglect or refuse to pay his assessment within ninety days from the date of mailing notice thereof, the board of directors shall cause a sufficient amount of the capital stock held by such stockholder to be sold at public auction to make good the deficiency, after giving ten days' notice thereof by personal service or by posting the same in the bank, and publishing it in some newspaper of the county in which the bank is located, which notice shall recite the assessment made, the amount due thereunder from the stockholder, and the time and place of sale; proof of all which may be made in the manner provided in the preceding section.'

After appellant had acquired his stock, a new section was added by the Act of March 13, 1925, c. 181, Iowa Laws 1925, now § 9248-a1 of the 1927 Iowa Code, reading as follows:

'Should the proceeds of a sale under the preceding section of all the stock of any stockholder be insufficient to satisfy his entire assessment liability he shall be personally liable for the deficiency, which may be collected by suit brought in the name of the bank against such stockholder.'

Following the adoption of this later section, the superintendent of banks determined that appellee's capital had been impaired 100 per cent., and directed an assessment accordingly. Acting under section 9248, appellee's directors sold appellant's stock for $1 a share, and the present suit was brought to recover the deficiency.

In answer to the objection that the act of 1925 subjected appellant to an unconstitutional burden, appellee relies on the statutes antedating appellant's acquisition of his stock, as imposing on him personal liability to pay the assessment, without the aid of the quoted provision of the later act. It also argues that, even if there was no such liability under the earlier statutes, the adoption of the act of 1925 was but an exercise of the power reserved to the Legislature by section 12, art. 8 of the Iowa Constitution, and by section 1619 of the 1897 Iowa Code (section 1090, Iowa Code of 1873), providing that 'the articles of incorporation, by-laws, rules, and regulations of corporations hereafter organized * * * shall, at all times, be subject to legislative control, and may be, at any time, altered, abridged, or set aside by law. * * *' It is insisted that the power thus reserved embraces, not only a legislative withdrawal of any grant of immunity to the stockholders of the bank, from liability for its debts, but extends to the imposition on them of a new and continuing liability to pay any assessment levied for the restoration of capital of the bank.

The Supreme Court of Iowa found it unnecessary to pass upon these contentions. Expressly disclaiming any purpose to decide either of them, it assumed, for purposes of decision, that under the earlier statutes the deficiency after sale of the stock could not be collected from the stockholder. It then proceeded to point out that from the beginning the authorized assessments were not upon the stock of the bank, but upon the stockholders personally, and said, 236 N. W. 10, 12:

'According to the original statute, the stockholder was personally and primarily liable for the assessment, and section 9248 and its predecessors had to do only with the remedy and nothing else. Then, assuming that the only remedy originally made for the collection of the assessment was to confiscate the stockholder's stock, nevertheless, so far as the remedy was sufficient, the stockholder was personally liable for the assessment. This burden was cast upon the stockholder himself, even though the only remedy to enforce the obligation was by the sale of the stock. Consequently, appellant's obligation in the premises had not been increased. He was always obligated to pay the assessment. Of course, if he did not pay, the only remedy under the statute was to sell his stock; yet the obligation to pay was there just the same. Now, under the new legislation, the stockholder's liability has not been increased, but rather the remedy for enforcing that obligation has been changed. Were the remedy a part of appellant's contract, a change thereof would amount to an impairment. Barnitz v. Beverly, 163 U. S. 118, 16 S. Ct. 1042, 41 L. Ed. 93; Conley v. Barton, 260 U. S. 677, 43 S. Ct. 238, 67 L. Ed. 456.

'Obviously in the case at bar, however, we are not confronted with a case where the remedy became a part of the contractual obligation. There is not a syllable in the statutory contract which in any way indicates that the remedy is a part of the agreement. It was not said by the Legislature that there could be no other or different remedy. Hence it was perfectly proper for the law-making body to adopt section 9248-a1 of the 1927 Code, because such amendatory legislation pertained to the remedy only. The purpose of this legislative enactment was to afford a more appropriate remedy for an obligation already existing against appellant. Ever since becoming a stockholder of the appellee bank, he was obligated to pay any legal assessment made for the purpose of repairing the capital stock. This new legislation simply recognized that obligation and afforded a more complete remedy to enforce the same. No new obligation was created by the amendment, but rather the old was recognized and a better way to enforce it provided.'

We find it unnecessary to answer the question implicit in this disposition of the case, whether an obligation can be said to exist apart from a remedy to enforce it-whether, within the meaning of the contract clause, any personal obligation of a stockholder in the nature of a contract to restore his pro rata share of any impairment of the corporate capital can be said to exist independently of some means or remedy for enforcing it in addition to the sale of his stock.

Nor are we called on to discuss here the suggestion that, even though the sale of the stock was the only means of collecting assessments, the contract and due process clauses do not guarantee appellant against the selection and the application to him of any other remedy reasonably adapted to carrying out the policy and purpose plainly declared by the earlier statute, to require complete restoration of any impairment of corporate capital by assessment of the stockholders. See Henley v. Myers, 215 U. S. 373, 30 S. Ct. 148, 54 L. Ed. 240; League v. Texas, 184 U. S. 156, 158, 22 S. Ct. 475, 46 L. Ed. 478; Graham & Foster v. Goodcell, 282 U. S. 409, 426, 51 S. Ct. 186, 75 L. Ed. 415; Milliken v. United States, 283 U. S. 15, 20 et seq., 51 S. Ct. 324, 75 L. Ed. 809; People v. Adams State Bank, 272 Ill. 277, 111 N. E. 989; Irvine v. Elliott (D. C.) 203 F. 82, 96, 97. For we conclude that appellant does not sustain the burden which rests on him of establishing that the later statute is unconstitutional because imposing a liability to which he was not subject under the earlier one.

In strictness, appellant presents no question of impairment of the obligation of contract for it is not insisted that either party has been deprived by legislative action of any right or remedy secured by the statute in force when appellant acquired his stock. His objection is not directed to any such impairment of right or obligation. It is rather that the act of 1925 imposed on him a personal obligation where none existed before, and that its imposition, by fiat of the law, after he had bought his stock, operates to deprive him of property without due process of law. See League v. Texas, supra, 184 U. S. 158, 161, 22...

To continue reading

Request your trial
46 cases
  • Brown v. Keefe
    • United States
    • United States Supreme Court
    • March 29, 1937
    ...... of ten shares of stock of the Union National Bank of Atlantic City, N.J. Since September 30, 1931, ...99, 102, 57 S.Ct. 65, 66, 81 L.Ed. 63; Shriver v. Woodbine Sav. Bank, 285 . Page 607 . U.S. 467, ......
  • Broderick v. McGuire
    • United States
    • Supreme Court of Connecticut
    • July 27, 1934
    ...to respond to calls in older to meet the claims of creditors in the manner provided by the law. Shriver v. Woodbine Savings Bank, 285 U. S. 467, 476, 52 S. Ct 430, 76 L. Ed. 884; Hirning v. Hamlin, 200 Iowa, 1322, 1326, 206 N. Y. 617; Duke v. Olson, 240 Ill. App. 198, 204. This contractual ......
  • McLiechey v. Bristol West Ins. Co.
    • United States
    • U.S. District Court — Western District of Michigan
    • January 13, 2006
    ...to its enforcement, other less appropriate common-law remedies are impliedly excluded." Id. (quoting Shriver v. Woodbine Savings Bank, 285 U.S. 467, 478, 52 S.Ct. 430, 76 L.Ed. 884 (1932)). In other words, the Michigan Court of Appeals has clearly held that a statutory remedy is not "plainl......
  • State v. Standard Oil Co. of Louisiana
    • United States
    • Supreme Court of Louisiana
    • November 2, 1937
    ...States v. Pacific Railroad, Fed.Cas.No.15,983, 4 Dill. 66, 27 F. Cas. 397." See, also, Shriver v. Woodbine Sav. Bank of Woodbine, Iowa, 285 U.S. 467, 52 S.Ct. 430, 434, 76 L.Ed. 884. The case of Pollard v. Bailey, 20 Wall. 520, 87 U.S. 520, 22 L.Ed. 376, 378, cited by defendant in support o......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT